Interpretation of the Internationalization Path of China Construction Machinery Enterprises

At present, the mid-year report of listed companies in the construction machinery industry has been disclosed. Listed companies, including industry giants such as Sany, Xugong, and Zoomlion, have suffered from shrinking market demand, broken capital chains, and new receivables. High difficulties. At the same time, the internationalization strategy of the construction machinery industry has also made substantive progress during this period. Domestic construction machinery companies including Sany, Xugong, Zoomlion, and Shandong Linggong have accelerated internationalization. According to statistics from the China Investment Association, domestic construction machinery industry exports reached 3.825 billion yuan in the first half of the year, an increase of 32.9% year-on-year.

However, due to the global financial situation, the development of the international construction machinery industry, and the turmoil in the international market, there are many uncertainties in the market demand for international construction machinery. For China’s construction machinery companies, everyone is currently crossing the river. What kind of approach to expand the international market does not have advantages or disadvantages.

Overseas M&A: Integration of Technology and Brand

Most of the companies mainly achieve the goal of internationalization through overseas acquisitions. Through the acquisition of overseas construction machinery companies in the international market, the integration of technology and brand is realized. According to related information, since the beginning of 2012, Chinese construction machinery companies have already launched offensives against European companies, especially the overseas acquisitions of industry giants such as Sany, Xugong, and Zoomlion in related fields.

Since the acquisition of Putzmeister on 364 million euros on the first day of the year, XCMG acquired 52% of the controlling stake in Schwing. Weichai Power spent 738 million euros to acquire 25% of KION and 70% of Linde Hydraulics. The acquisition of M&A in Europe has become a big deal. Recently, Reuters disclosed that another domestic engineering machinery giant China Machine Industry Corporation (SINOMA Group) has formally submitted a tender offer to German MAG Group.

"The internationalization through mergers and acquisitions has the following advantages." The person in charge of Shandong Lingong Strategic Planning Department analyzed the reporter: "First, the current European debt crisis has spread. Most of the top engineering machinery companies have the intention of selling or joint ventures, and the threshold is lowered. The second is that after recent years of development, the practice of Chinese companies in foreign mergers and acquisitions has brought sufficient experience to their peers and can take a lot of detours. Third, through mergers and acquisitions, it can directly achieve the purpose of localization, and the existing enterprises. The integration of technology and branding will give companies a certain degree of convenience in opening up the local market.”

“But M&A also has certain problems, and these problems are that these companies need to carefully consider before acquisitions and mergers and acquisitions.” Experts of industry associations said: “First, the issue of cash flow security, the characteristics of the construction machinery industry will determine The industry has high access and investment, and the capital required for natural M&A is a huge number. Currently, the financial status of listed companies is not so optimistic. Second, the integration of cross-cultural background of multinational companies after mergers and acquisitions has always been Difficulties in the field of corporate management; Third, mergers and acquisitions can not immediately form the advantages of the market and production capacity, which takes time, and time is precisely the most variable of a bad estimate.

Service pioneer, brand winning

“As the main strategy for the internationalization of the company, Shandong Lingong, taking the emerging countries such as the BRICS countries and Middle East countries as the center, and expanding the channels, improving services and brand building as the main line, it is the temporary workers who have obtained the international market for half a year. The key to the breakthrough." The person in charge of Linggong introduced.

In Brazil, through the support of Volvo's strong after-sales service, and with strong technical reserves, as well as research on the global market and the local market, we have continuously developed new products to attract more Brazilian users by increasing the cost-effectiveness of the products. In 2011, Shandong Lingong’s export volume and market share in Brazil ranked first among Chinese brands. The market expansion in Russia has shifted from the initial pure export trade to the localization construction of the Linggong brand. Linggong operates in the Russian market and has established a marketing service system covering all of Russia through two agents.

“Lingong's choice of such a tortuous and difficult internationalization road is the result of careful management by the management. It can also be said that it is the choice that best meets the development status of temporary industrial enterprises.” When a reporter asked why Pro trade unions were “innovation” strategy. The person in charge of the Planning Department told reporters.

“One is that Lingong is a latecomer to catch up in the industry, and if it is just a step-by-step learning leader, it can be said that it is a dead end. Second, LinGong has made great progress in these years. Development, but compared to Sany and its counterparts, we must recognize that there are still gaps in the scale of capital. Third, for the analysis of overseas markets, the output value of China's construction machinery industry has reached 500 billion yuan in 2011, while the international Although the market demand is strong, it is difficult to digest the huge capacity of the domestic construction machinery industry because of its demand of slightly more than RMB100 billion, and the judgment of this point is the main reason why Lingong’s preemption of the “scratch area” through channels. With the opening and support of Volvo’s global market channels for temporary workers, Lining’s overseas expansion will continue to show a high growth trend.”

Of course, the internationalization strategy of Shandong Lingong also encountered some difficulties. First, the rise in costs caused by the rise of overseas trade protectionism, and second, the exchange rate and currency risks and rising costs caused by the pressure of RMB appreciation, all of which require Workers must speed up the process of localization overseas.

Although internationalization through overseas mergers and acquisitions is a shortcut, Chinese companies will face challenges from legal aspects, corporate management, talent pools, and their own risk control capabilities, and will take longer to digest and absorb advanced foreign technologies. Development experience. Shandong Lingong relied on its unique international strategy, built on channel construction and service enhancement, and made breakthroughs in brand building. It has achieved remarkable results in exploring international markets, especially in emerging markets such as Brazil and Russia.